JUDGMENT
Mahmood Ali Khan, J.
1. The petitioner MCD has challenged an order of the Additional District Judge dated 26.11.1996 by which he has allowed the appeal of the respondent and has fixed market price of the land comprised in the premises at the L&DO rates of Rs. 1200/- per sq. mtr and modified the rateable value fixed by the Deputy Assessor and Collector (SCTT) in house tax assessment order.
2. The Deputy Assessor and Collector fixed the rateable value of property No. L-31/A, Malviya Nagar assessing the cost of the land comprised in the premises @Rs. 2200/- per sq.mtr. The respondent was aggrieved and preferred and appeal before the Additional District Judge under Section 169 of the Delhi Municipal Corporation Act (hereinafter the Act). The appeal was on the short ground that the Assessing Authority has wrongly assessed the cost of land @Rs. 2200/- per sq. mtr and that the land belonged to the Land and Development Office and the cost thereof should have been assessed at the L&DO rate of Rs. 1200/- per sq.mtr prevailing during the relevant period. The learned Additional District Judge accepted this plea and modified the rateable value of the property by assessing the cost of the land comprised in the premises @Rs. 1200/- per sq.mtr which was the L&DO rate of land. Now it is the turn of the MCD to be aggrieved by this order. It has filed the present petition challenging this order.
3. In Dr. Balbir Singh v. M.C.D. the Supreme Court laid down that the rateable value of the property in house tax should be assessed on the formula contained in Section 6 and 7 of Delhi Rent Control Act by which standard rent of premises is fixed. In accordance with provision of Section 6 the market price of the land comprised in the premises is to fixed as on the date of the commencement of the construction of the premises. A Division Bench of this court in MCD v. O.P.Gosain and Ors. while deciding the civil writ petition No. 4122/90 by order dated 24.10.1991 laid down the law as under which aptly apply to the controversy raised in the instant case:-
“The best evidence for determining the market rate is the actual sale price of similar land near the land in question. One of the manners in which the price is determined is to see the auction rate”
“…..We have held in a number of cases that the various circulars issued by different departments indicating the prices of lands can only, at best, be regarded as pieces of evidence but they are not conclusive in the matter. The best evidence are the actual sale prices. Any statement which is prepared can only be regarded as a sort of secondary evidence which may be referred to in the absence of primary evidence.”
4. A similar question came up before another Division Bench in MCD v. N.C.Jain and Ors. Vol. in which it was observed as follows:-
“A division bench of our Court in Civil Writ No.438/88 decided on 26th April, 1990 came to the conclusion that where it was not apparent from the schedule rates in the said circulars at to how they were determined then the Assessor and Collector should re-determine the market price of the land in question by regarding the circulars so issued merely as pieces of evidence. Applying the aforesaid ratio to the present case the two circulars issued, namely, one by the Corporation and the other by the DDA are merely pieces of evidence and the Additional District Judge instead of himself determining the rate to be applied ought to have set aside the order of assessment and remanded the case to the Assessor and Collector with the direction to determine the market price of the land in accordance with law. One of the basis for arriving at the market price of land is by invoking the principles contained in Section 24 of the Land Acquisition Act while determining the market price of land which is acquired by way of acquisition. The assessing authority should try and ascertain as to the market rate of land on the bases of sale deed, auction prices etc, near about the time when the construction began in the immediate or near vicinity of the land where it is situate. If this evidence which would be primary evidence, is not available, then reference and reliance can be placed on such circulars which are issued by various government department. If the said circualrs are contradictory, as they appear to be in the present case, then it would be the duty of the Assessor and Collector to try and ascertain from those government departments the basis on which the said government departments have fixed the land rates.”
5. Analysing the facts of the present case in the light of the above-cited two decisions of the Division Bench of this court, it is noteworthy that the Deputy Assessor and Collector in his assessment order dated 23.1.1991 so far as the market price of the land comprised in the property in question related made the following observation. “The plot is lease hold but there is no provision for the unearned increase. It is chargeable only on the first transfer. During hearing Shri Sarna pleaded that the land rate should be adopted at Rs.1200/- per sq.mtr. The tax payers plea cannot be accepted because the market rate prevalent in 1983 were Rs. 2200/- per sq.mtr. In view of these facts, the market value of the land being admitted is Rs. 2200/- per sq.mtr…..”
6. It is manifest from this order that though the Tax Assessing Authority adopted Rs. 2200/- per sq.mtr as the rate of the land assuming it to be market rate but has not elaborated as to how and what material was before him for working the land at that rate. It was not stated that he had considered the examplers i.e. the examples of the sale deeds of similar lands in the vicinity executed near about the relevant period. Nor has he stated that he had taken the price of the auction of similar land in this area. It has also not been mentioned that the price of the land fixed by different agencies and authorities like L&DO, MCD DDA or under Land Acquisition has also taken into consideration for arriving to the rate of land being Rs. 2200/- per sq.mtr. Therefore, the fixing of land rate at Rs. 2200/- is evidently whimsical and irrational and without any sound and reasonable basis. It is also in contravention of the law enunciate in of Dr. Balbir Singh (supra) and the above cited cases.
7. The order of the Deputy Assessor and Collector dated 23.1.1991 was challenged under Section 169 of the Act before the learned Additional District Judge on the ground that the market price of the land has been wrongly assessed at the rate of Rs. 2200/- per sq.mtr., and since the land belonged to the L&DO and the L&DO has fixed the price of the land at Rs. 1200/- per sq.mtr., therefore, the Assessing Officer should have fixed the market price of the land comprised in the premises at that rate. The learned Additional District Judge agreed with the argument of the respondent that it being L&DO land, the L&DO rate should be accepted for assessing the rateable value. He also referred to the judgment of MCD v. Ranbir Singh Jain and Ors. passes on 1.12.1989 in civil writ No. 2647 of 1989 by a Division Bench. However, he did not take into consideration the judgment of the Supreme Court in Dr. balbir Singh’s case and the aforementioned two judgments of the Division Benches cited. In MCD v. Ranbir Singh Jain and Ors. CWP 2647/89 decided on 1.12.1989 a Division Bench of this High Court has passes the following order:-
“Rule D.B. Having heard the learned counsel for the petitioner and the respondent we are of the opinion that the order of the Additional District Judge is erroneous, in that he has relied upon the L&DO rates without recording any finding whether the colony where the respondent’s house falls is within the same notification or not. The order is set aside. We remand the matter to the Assessing Authority. Assessing Authority will give opportunity to the respondent to produce whatever evidence they think proper and pass fresh order after giving them hearing.”
8. The learned Additional District Judge in his order has referred to this order in support of his view that the L&DO rate of land should have been taken into consideration by the assessing authority. The judgment does not lay down that the L&DO rates of land should be the sole criteria for determining the market price of the land comprised in the premises under assessment. The subsequent judgments of the Division Bench which have been cited in above paragraph have clearly laid down that the rates of land issued by different agencies like L&DO are only secondary evidence and the rateable value should be fixed taking into account the market price of the land comprised in the premises decided on the best evidence i.e. the sale price of the land and in case the sale deeds and auction price of the land in the vicinity is not forthcoming, then other evidence including the rates of land issued by the L&DO and other agencies including Land Acquisition should be taken into consideration.
9. The market price of the land comprised in the premises is to be assessed on the date of the commencement of the construction on the basis of the best evidence available. The best evidence is the examples of the registered sale deeds of the land in the vicinity executed near about the period when the construction had commenced and also the price which the similar land fetched in auctions near about the same time. If examples are not available or there was no auction of the land, and no other evidence is available then the next best thing could be the rate of the land which is fixed by the different government agencies for the relevant period like the MCD, Land and Development Office of the Government of India, the Delhi Development Authority and the price fixed for land acquisition by the State Government. There may be other evidence also. The attempt shall however be made by the assessing authority to fix the price of the land on the basis of the best evidence i.e. the sale price of the land. The other evidence may be the secondary evidence as held by the Division Bench in the above cited judgments.
10. In the instant case the market price of the land has been fixed by the learned Additional District Judge on the sole basis of the price of land fixed by the L&DO for its land. This is not in consonance with the principles of law laid down by the Supreme Court in Dr. Balbir Singh’s case and the two judgments of the Division Bench in MCD v. O.P. Gosain and Ors. (Supra) and MCD v. N.C. Jain and Ors. (Supra). As a result the order of the learned Additional District Judge cannot be sustained. This view finds support from the decision of this court in CM(M) No. 359/97 in MCD v. Pushpa Khullar decided on 2.11.1999 and MCD v. Sukhdev Singh Bhalla in CR 239/98 decided on 17.8.1999.
11. As a result the petition succeeds. The order of the Additional District Judge dated 26.11.1996 is set aside. The case is remanded back to the assessing authority to determine and assess afresh the rateable value of the property in question in the light of the principles laid down in the case of Dr. Balbir Singh (supra) and the two cases of the Division Bench of this court in MCD v. O.P. Gosain and Ors. (Supra) and MCD v. N.C. Jain and Ors. (Supra) cited in the foregoing paragraphs. The parties shall appear before the assessing officer on 20.12.2001 at 11.00 A.M. for fixing the date of hearing in the matter. The petition stands disposed of.